As WINHELLER reported lately, the fifth European Money Laundering Directive was implemented by the German parliament in November 2019. The directive came into force on January 1, 2020. As a result, Germany and the other member states of the European Union are obliged to treat providers of cryptocurrencies as obligated under money laundering law.
In Germany, legislators have taken the EU directive as an opportunity to subject companies offering a custody service for cryptocurrencies to extensive regulation.
Custody service companies are required to apply for a German license
Under the German implementation law, all companies that offer a custody service for their customers (for example providing a wallet) are forced to apply for a licence from the BaFin, the German Federal Financial Supervisory Authority. Services with cryptocurrencies can be compared with trading in shares or bonds. They are legally not treated differently.
BaFin has already received 40 expressions of interest from licensed banks for a license for custody and other services related to cryptocurrencies. This was reported by the German Handelsblatt.
A lot of interest for German BaFin license
Whether this is equivalent to a run on the BaFin license among German banks remains to be seen. The number of expressions of interest is not synonymous with a request for permission. The expression of interest is informal and non-binding and voluntary. The levy has no impact on a future licensing process. It is then another BaFin department that decides on the application for permission.
The number of expressions of interest therefore does not necessarily allow conclusions to be drawn about future competitors. The German crypto-custody business has specific requirements that are also a challenge for banks.
WINHELLER supports crypto-custody businesses
If you are interested in starting your crypto business in Germany or if you want to address the German market, we would be happy to help you overcome the German license challenge. We support you with all steps concerning your German license and the corresponding communication with the German BaFin.